Bitcoin's Holiday Struggles: Why BTC's Santa Rally May Not Happen

Bitcoin is currently experiencing one of its toughest fourth quarters, on track for its second-worst performance in history. So far in Q4 2025, this cryptocurrency has decreased by 22.8%, resulting in a gloomy holiday season as it struggles to maintain values above $85k.

Key Takeaways

Bitcoin is facing a significant decline in Q4 2025, down 22.8%.
Gold outperforms Bitcoin with a 69% annual gain.
Potential volatility is expected around Christmas due to low liquidity and options expiry.
Major players are keeping Bitcoin prices between $85K and $90K.
Demand for Bitcoin shows signs of decline, raising concerns about further market challenges.
Historical support for Bitcoin could be at $70K, with potential bear market bottoms at $56K.

Bitcoin's Christmas blues - Why BTC's Santa rally can be cancelled

Bitcoin

Source: CoinGlass

Interestingly, in contrast to other asset classes, gold has had an impressive year, reporting 69% annual gains, while Bitcoin saw a decline of 5%. This situation raises the question: What lies ahead for Bitcoin [BTC] as we approach the end of the year?

Is a BTC Bounce Expected After Christmas?

According to insights from the crypto trading desk QCP, the holiday season's low trading activity and a significant options expiry on December 26 could lead to increased market volatility. QCP analysts maintain a cautiously optimistic outlook, noting,

“Downside positioning has eased as open interest for $85k puts decreases, whereas $100k calls remain, indicating some tentative optimism for a Santa rally.”

They pointed out that while bearish sentiment has softened, market activity may still remain stable until December 31.

However, Options expert David anticipates a significant upward movement following Christmas Day. He stated,

“Expect fluctuations until Christmas, followed by a potential surge after the pin is released.”

Bitcoin

Source: David/X

David indicated that major players are keeping the price stable between $85K and $90K through bearish and bullish bets, which corresponds to a gamma exposure of $300 million.

After the expiration on Boxing Day, Bitcoin may have the potential to break out of this price range. This trend is also reflected in liquidation heatmaps, where upside liquidity pools are centered around $90K and $95K, while downside positions hover at $84K.

This indicates possible significant price movements that could reach these levels.

Bitcoin Christmas

Source: CoinAnk

Declining Demand for BTC

Despite these potential moves, CryptoQuant raised concerns about the diminishing demand for Bitcoin, which could signal further declines in the market. Their report stated,

“Demand growth has slowed since early October and is now underperforming historical trends. Consequently, we believe that the majority of demand growth in this cycle is behind us, leading to bearish price pressures.”

Bitcoin

Source: CryptoQuant

CryptoQuant further indicated that Bitcoin's bear market could potentially find a bottom at $56k, with immediate support expected at around $70k, based on historical data.

Final Thoughts

As Bitcoin navigates a challenging end to the year, its future remains uncertain, with various factors influencing market dynamics. Investors should remain vigilant and assess evolving conditions as we approach the new year.